Bernard v. Gulf Oil Corporation Brief for Appellants
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May 15, 1987

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Brief Collection, LDF Court Filings. Bernard v. Gulf Oil Corporation Brief for Appellants, 1987. 5f390ec8-c69a-ee11-be37-00224827e97b. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/2340b328-2589-4d08-b551-7bf916350cd7/bernard-v-gulf-oil-corporation-brief-for-appellants. Accessed April 29, 2025.
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IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 87-2033 WESLEY P. BERNARD, et al., Plaintiffs-Appellants. v. |guGULF OIL CORPORATION, et al.. ( DeDefendants-Appellees On Appeal From The United States District Court For The Eastern District Of Texas Beaumont Division BRIEF FOR APPELLANTS ULYSSES GENE THIBODEAUX Newman & Thibodeaux 1925 Enterprise Boulevard Lake Charles, Louisiana 70601 (318) 439-1060 STELLA MARIE MORRISON 1015 East Gulfway Drive Port Arthur, Texas 77640 (409) 985-9358 JULIUS LeVONNE CHAMBERS JUDITH REED ERIC SCHNAPPER PAMELA KARLAN NAACP Legal Defense & Educational Fund, Inc. 99 Hudson Street 16th Floor New York, New York 10013 (212) 219-1900 Counsel for Plaintiffs-Appellants IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT NO. 87-2033 WESLEY P. BERNARD, et al. , Plaintiffs-Appellants. v. GULF OIL CORPORATION, et al. , Defendants-Appellees. CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed persons have an interest in the outcome of this case. These representations are made in order that Judges of this Court may evaluate possible disqualification or recusal. Plaintiffs: Wesley P. Bernard Hence Brown Rodney Tizeno Willie Johnson Elton Hayes Doris Whitley All blacks employed in hourly positions at the Port Arthur refinery of the Gulf Oil Corporation on or after December 26, 1965. Defendants: Gulf Oil Corporation Oil Chemical and Atomic Workers' International, and its Local No. 4-23 Bricklayers, Masons, and Plasterers International and its Local No. 13 International Association of Machinists and Aerospace Workers and its Port Arthur Lodge No. 823 International Brotherhood of Electrical Workers and its Local No. 390 United Transportation Workers International Union and its Port Arthur Local Chevron Corporation, parent company of the defendant Gulf Oil Corporation. Appellants ii STATEMENT REGARDING ORAL ARGUMENT Plaintiffs-appellants hereby request that this case be set for oral argument. This appeal involves more than half a dozen distinct and important legal issues. In most instances either the nature of the issue or the relevant facts cannot be gleaned from the opinion of the district court. Although the resolution of many of the issues on appeal should not be difficult, we believe that oral argument would be valuable to the court in discerning the nature of the questions requiring decision. iii TABLE OF CONTENTS Page Certificate of Interested Persons ................. i Statement Regarding Oral Argument ................. iii Table of Authorities ............................... iv Statement of Jurisdiction .......................... 1 Statement of the Issues Presented ................. 1 Statement of the Case .............................. 2 Statement of the Facts.............................. 4 (1) Craft Promotion Tests ................... 5 (2) Denials of Promotions Based on Sickness and Accident ................... 6 (3) Abrogation of Minority Seniority Rights: Stipulation 29 .................. 7 (4) Bona Fides of the Seniority System ..... 12 (5) Promotions To Supervisory Positions .... 18 Summary of Argument ................................ 19 Argument ............................................ 21 I. Gulf's Craft Promotion Tests Were Not Job-related .......................... 21 (1) The Old Test ........................ 21 (2) The New Test ........................ 2 3 II. Gulf Engaged In Intentional Dis crimination in Denying Promotions Based on Sickness and Accident Records... 29 III. The Defendants Unlawfully Abrogated the Seniority Rights of Blacks .......... 32 IV. The Seniority System Was Not Bona Fide .. 34 iv V. Gulf Engaged in Intentional Discrim ination in Making Promotions to Supervisory Positions ................... 37 VI. Union Liability.......................... 39 VII. The District Court Erred in its Ruling on Individual Claims .................... 39 VIII. The District Court Erroneously Restricted the Scope of the Plaintiff Class .................................... 42 IX. The District Court Erred in Not Admitting Defendants' Business Records .................................. 4 6 Conclusion .......................................... 49 v TABLE OF AUTHORITIES Cases: Page Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) ............................. 21,22,23,26 Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974) .............................. 43 American Tobacco Co. v. Patterson, 456 U.S. 63 (1982) .............................. 33 Bernard v. Gulf Oil Corp., 619 F.2d 459 (5th Cir. 1980) (en banc), af f'd 452 U.S. 89 (1981) .............................. 3,44 Boykin v. Georgia-Pacific Corp., 706 F.2d 1384 (5th Cir. 1983), cert, denied. 465 U.S. 1006 (1984) ............................ 30 Bunch v. Bullard, 795 F.2d 384 (5th Cir. 1986) ................................. 23,30 California Brewers v. Bryant, 444 U.S. 598 (1980) ............................. 32 Carmichael v. Birmingham Saw Works, 738 F. 2d 1126 (11th Cir. 1984) ................. 40 Chaiffetz v. Robertson Research Holding, 798 F . 2d 731 (5th Cir. 1986) ................... 30,32 Donaldson v. Pillsbury Co., 554 F.2d 825 (8th Cir. 1977), cert, denied. 434 U.S. 856.... 40 Ensley Branch of NAACP v. Seibells, 616 F.2d 812, aff'q in part and rev'q in part 14 FEP Cas. 670 (N.D. Ala. 1977) ............... 28 Griffin v. Carlin, 755 F.2d 1516 (11th Cir. 1985) ................................ 40 Griggs v. Duke Power Co., 401 U.S. 424 (1971) ....21, 22,29,32,33 Guardians Ass'n of New York Police Dep't v. Civil Service Comm'n, 630 F.2d 79 (2d Cir. 1980) .................................. 28 Gulf Oil Corp. v. Bernard, 452 U.S. 89 (1981) .... 44,45 vi Cases: Page James v. Stockham Valves & Fittings Co., 559 F . 2d 310 (5th Cir. 1977) ................... 27,34,38 Jenkins v. United Gas Corp., 400 F.2d 28 (5th Cir. 1965) ................................. 38 Johnson v. Goodyear Tire & Rubber Co., 491 F . 2d 1364 (5th Cir. 1974) .................. 22 Lams v. General Waterworks, 766 F . 2d 386 (8th Cir. 1985) ................... 42 Local 53 v. Vogler, 407 F.2d 1047 (5th Cir. 1969) 22 Local 189, United Papermakers & Paperworkers v. United States, 416 F.2d 980 (5th Cir. 1969) 22 Mosley v. St. Louis Southwestern Railway, 634 F.2d 942, (5th Cir.) cert, denied. 452 U.S. 986 (1981) .............. 43,45 Nanty v. Barrows, 660 F.2d 1327 (9th Cir. 1981) 42 Payne v. Travenol Laboratories, 673 F .2d 798 (5th Cir. 1982) cert, denied. 459 U.S. 1038 (1983) ............. 30 Pettway v. American Cast Iron Pipe Co., 494 F . 2d 211 (5th Cir. 1974) ................... 22,27 Ratliff v. Governor's Highway Safety Program, 791 F . 2d 394 (5th Cir. 1986) ................... 30 Rivier.a v. City of Wichita Falls, 665 F. 2d 531 (5th Cir. 1982) ................... 27,28 Rogers v. General Electric Co., 781 F . 2d 452 (5th Cir. 1986) ................... 43 Teamsters v. United States, 431 U.S. 324 (1977) ............................. 33,34 Terrell v. United States Pipe & Foundry Co., 644 F . 2d 1112 (5th Cir. 1981) .................. 34 United States v. Georgia Power, 474 F . 2d 906 (5th Cir. 1973) ................... 22 vii Cases; Page Watkins v. Scott Paper Co., 530 F. 2d 1159 (5th Cir. 1976) .................. 27 Statutes. Rules, and Regulations: 28 U.S.C. § 1291 .................................... 1 42 U.S.C. § 1981 .................................... 3 29 C.F.R. § 1607.4 (c) .............................. 23 29 C.F.R. § 1607.14 (B)(6) ......................... 28 Rule 1, Fed. R. Civ. P .............................. 48 Rule 5(a), Fed. R. Civ. P ........................... 47 Title VII of the 1964 Civil Rights Act............. 3 Other Authorities: B. Schlei & P. Grossman, Employment Discrimination Law. (2d ed. 1983) ............. 27 viii IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 87-2033 WESLEY P. BERNARD, et al.. Plaintiffs-Appellants. v. GULF OIL CORPORATION, et al.. Defendants-Appellees. On Appeal From The United States District Court For The Eastern District Of Texas Beaumont Division BRIEF FOR APPELLANTS STATEMENT OF JURISDICTION The decision of the district court resolving the merits of this case was issued on September 18, 1986. A timely motion to alter or amend the judgment was denied on December 8, 1986. Plaintiffs-appellants' notice of appeal was filed on January 5, 1987. This court's jurisdiction is invoked under 28 U.S.C. § 1291. STATEMENT OF THE ISSUES PRESENTED (1) Did the district court err in holding that as a matter of law written tests in use prior to 1972 were exempt from the Title VII prohibition against tests with a discriminatory effect? (2) Did the district court err in holding that the promotion test utilized by Gulf since 1971 was job-related? (3) Did the district court err in holding that Gulf did not engage in intentional discrimination in evaluating the sickness and accident records of workers seeking promotions? (4) Did the district court err in holding that Stipulation 29, which abrogated seniority rights in a manner having discriminatory effect on blacks, did not violate Title VII? (5) Did the district court err in holding that the seniority system was bona fide? (6) Did the district court err in holding that Gulf had not engaged in intentional discrimination in the selection of supervisors? (7) Did the district court err in holding that the union defendants were not liable for any proven violation of Title VII? (8) Did the district court err in its disposition of the claims of the individual plaintiffs? (9) Did the district court err in partially decertifying the class to exclude class members who had signed releases, where there was evidence indicating the releases were not knowing and voluntary? (10) Did the district court err in refusing to consider union and company records offered in evidence by the plaintiffs? STATEMENT OF THE CASE This action was commenced in May, 1976, by six present and retired black employees at the Gulf Oil Corporations, Port Arthur, Texas, refinery. The plaintiffs, who are also present or 2 former members of the Oil, Chemical and Atomic Workers' Union, Local 4-23 ("OCAW") alleged that Gulf, the OCAW, and several other unions engaged in broad range of employment discrimination against black employees. Plaintiffs sought declaratory, injunctive, and monetary relief, pursuant to 42 U.S.C. § 1981 and Title VII of the 1964 Civil Rights Act. The Title VII claim is premised, inter alia, on a complaint filed with EEOC on June 24, 1967. (Record Excerpt ("RE") 22; Class Cert. Ex. 1-1, 2, 3). In 1976, following the filing of the complaint, the district court issued an order forbidding counsel for the plaintiff class from communicating with the class members about the pending case. (Record ("Rec.") 26). In 1977 the district court dismissed plaintiffs' Title VII claims on procedural grounds, and granted defendants summary judgment on the § 1981 claims. This court reversed, holding that the gag order was improper, and remanded the case. Bernard v. Gulf Oil Coro. . 619 F.2d 459 (5th Cir. 1980) (en banc), aff'd. 452 U.S. 89 (1981). On January 24, 1983, the district court, following an evidentiary hearing, certified a plaintiff class that included all black persons who were employed in union jobs at Gulf's Port Arthur refinery on or after December 26, 1965. On the eve of trial, the district court issued sua soonte an order effectively excluding from the class a large number of class members, based largely on certain disputed releases obtained by Gulf during the period when the unlawful gag order was in effect. (RE 52) . This order also dismissed all defendant unions except for the OCAW. Id. 3 The case was tried in April 1984, and the record for several months thereafter remained open for the submission of additional documentary evidence. (Rec. 1666, 1692). Subsequently the district court declined to admit certain business records of the defendants which the plaintiffs had sought to introduce. (RE 65). On September 18, 1986, the district court issued a Memorandum Opinion rejecting on the merits all of plaintiffs' claims. (RE 21). STATEMENT OF THE FACTS The Port Arthur Refinery at issue in this case refines crude oil into a variety of commercial products. The plant began operations early in the century, and was unionized in the 1940's. (Trial Transcript ("Tr.") 12). During most of the period prior to 1965 the refinery and unions were organized on an avowedly racial basis. Blacks were hired only into certain jobs and could not promote into white positions.1 The highest paid "colored" job received a lower hourly wage than the worst paid entry level "white" job. (Tr. 1008-09). Washrooms, water fountains, and other facilities were segregated. Blacks actually worked in most departments throughout the refinery, but were organized along racial lines. The unions other than the (OCAW) sought to represent only white jobs. The OCAW chartered two separate locals at the refinery; Local No. 23 represented white workers and Local No. 254 represented black workers. (RE 23-24, 30-31). By 1965 neither the company nor the unions maintained expressly racial policies but virtually all blacks in the 1 Tr. 21-22, 144-45, 212-13, 220, 281, 996, 999, 1000. 4 refinery were still confined to the positions designated as colored jobs during the era of overt discrimination. During the years following enactment of Title VII virtually all desirable promotions at the refinery continued to go to whites only. (Plaintiffs' Exhibit ("PX") 16, 37, 38) . This appeal concerns the legality of five promotion practices which were in effect at the refinery in the period following 1965. Most of the relevant facts are not in dispute. (1) Craft Promotion Tests Employees seeking to promote into a craft position at the refinery have often been required by Gulf to pass a written examination. The same test was utilized for 14 different jobs, including such diverse positions as carpenter, painter, welder, insulator and boilermaker. (PX 87) . Between 1947 and 1971 a test, referred to as the Old Test, was used for all fourteen positions. After 1971 a different examination, referred to as the New Test, was utilized. The New Test consisted of several different parts dealing inter alia with chemical, mechanical, and arithmetic reasoning. The New Test was also utilized for all 14 positions; thus an employee might be barred from a job as a carpenter because of a lack of understanding of chemistry, or from a painter's job because of a low score in mathematics. (RE 35-36, 40-41). The district court correctly concluded that both the Old Test and the New Test had an adverse impact on blacks. 82.5% of whites who took the Old Tests between January 1969 and March 1971 ultimately passed. Only 42.8% of blacks who took the same tests during that period ultimately passed. Between 1971 and 1980, 97.7% of the 5 whites who took the New Tests passed them, while only 66% of the blacks who took those tests passed. (RE 16) . The district court concluded that these findings established "adverse impact because the proportion of blacks passing the tests is less than 80% of the proportion of whites passing the tests. See C.F.R. 1607.4(D) (1981)." (RE 36).2 The adverse impact of the New Test was particularly extreme. For all practical purposes the sole effect of the New Test was to bar blacks from craft promotions. Among the 174 whites who took the New Test only 3 failed it. Overall 90% of those who failed the New Test were black, even though only 33% of the test takers were black. (PX 27, Defendants' Exhibit (DX) 108). Gulf's own testing expert conceded it would be irrational to use any test passed by virtually all whites. (Tr. 930-31). The issues presented on appeal concern whether the disputed tests were job related. (2) Denials of Promotions Based on Sickness and Accident Gulf ordinarily awarded craft vacancies to the senior eligible bidder who could pass the test. The collective bargaining agreement, however, also accorded to Gulf the right to reject or "bypass" the senior bidder because of his sickness and accident ("S and A") record. (RE 41-42) . Prior to 1975 Gulf chose not to reject senior bidders on that basis. Between 1975 ̂ To be exact, the pass rate of blacks on the Old Test was only 52% of the pass rate of whites (12 out of 28 Blacks and 33 out of 40 whites passed: PX 25; DX 131). For the New Test, the pass rate of blacks was only 66.3% that of whites (56 of 86 blacks and 171 out of 174 whites passed: PX 27; DX 108). 6 and 1980, however, Gulf bypassed 33% of all black senior bidders, compared to only 22% of whites. (PX 29) . Black senior bidders were bypassed while comparable whites were merely warned about their sickness and accident records.3 Gulf did not apply an objective mechanical test in determining which bidders to reject because of their S and A record. Rather, as the district court noted, the company inspected the bidder's record and made a discretionary judgment as to who was "satisfactory." (RE 41-42). Thus the authority to bypass a bidder because of his or her S and A record came to be used so broadly as to give Gulf considerable ability to select the bidder of its choice regardless of the seniority of the other employees seeking a particular promotion. Although Gulf evidently scrutinized only the S and A records of employees who had missed more than 80 hours of work in the prior year (RE 41), that group, understandably, encompassed a substantial proportion of all senior bidders.4 (3) Abrogation of Minority Seniority Rights; Stipulation 29 Under the Gulf/OCAW seniority system, as it existed in 1965, most workers afforded advantageous seniority rights were white. However, under the seniority rules as they existed in 1965 blacks were in a position to fill most vacancies in the J Tr. 372, 380, 440-45, 578-83. 4 Eighty hours a year is equivalent to 10 days of work. By comparison, in 1981 the average American was disabled by illness or injury a total of 18 days. Statistical Abstract of the United States, 1985, p. 113. 7 f lucrative craft jobs. Prior to 1967, selections for a craft job occurred under what was, in effect, a line of progression: Pipefitter Mechanic Trainee Pipefitter Helper Mechanical Helper Pool Utility Man Whenever Gulf decided it wanted another pipefitter, pipefitter helpers could bid on the job on the basis of plant seniority. The successful senior bidder then became a mechanic trainee, and was placed in a three year training program, at the end of which he automatically became a craftsman. Virtually every entrant successfully completed the training program. When the promotion of a pipefitter helper created a vacancy at that level, it was filled, again on the basis of plant seniority, from workers in the mechanical helper pool, whose vacancies were filled in turn from the utility man level. PX 30, DX 38, Tr. 249-50). As of 1965 the pipefitter helpers were almost all comparatively junior whites, whereas there were large numbers of very senior black utility men. For example, as of January 1967 there were 110 utility men, all of them black, with at least 23 8 years of plant seniority; among pipefitter helpers, however, there were only 6 workers with that much seniority. The most senior pipefitter helper was hired on June 25, 1934; there were 39 utility men with more plant seniority. (PX 18; DX 103). .Although under the 1965 rule the first promotions in any craft would necessarily have gone to a pipefitter helper, the pipefitter helper positions would then quickly have been filled by the most senior utility man, who would thereafter have been next in line for craft vacancies. Since large numbers of black utility men had more seniority than any helper, most subsequent promotions would have gone to black utility men who became helpers after 1965 rather than to the whites who were helpers in that year. Thus, under the craft selection system as it existed prior to 1967, new mechanic trainees and craftsmen would, as a practical matter, have been chosen on the basis of plant seniority from among the helpers and utility men as a group. The black utility men were never permitted, however, to exercise those seniority rights. Instead, in 1967 Gulf and the OCAW agreed, as the district court noted, simply to "reclassif[y]" the craft helpers as mechanic trainees. (RE 34). A total of 203 pipefitter helpers became craftsmen in this manner. (PX 9, 133; Tr. 31, 984-85) In no instance before or after the implementation of Stipulation 29 did employees become craftsmen simply by being "reclassified." Under Stipulation 29 no vacancies were ever posted, and no employees other than the helpers were eligible for the program. The seniority of the more senior utility men simply could not be utilized to qualify for 9 "reclassification;" Stipulation 29 abolished with the stroke of a pen the seniority rights of utility men to use their seniority to obtain craft positions ahead of more junior helpers. (Tr. 230- 34, 283-85, 1263-69, 1281). Several aspects of Stipulation 29 were particularly noteworthy. First, Gulf did not of course assert that it suddenly needed 203 new craftsmen in 1967. The total number of new craftsmen was completely out of line with the normal rate at which craftsmen were selected and trained. There were apparently no new craftsmen chosen in 1965, and only 12 in 1966.5 During the seven years from 1967 through 1973 Gulf added only a total of 106 craftsmen, or 15 per year. (DX 110) . The one time reclassification under Stipulation 29 created more new craftsmen than were filled by promotion during the entire decade between 1965 and 1974. Stipulation 29 did not fill then existing vacancies, but effectively preempted, and removed from normal seniority bidding, all vacancies that might arise for years into the future. Under Stipulation 29, for example, 86 boilermaker positions were filled with one blow in 1967; between 1967 and 1973 only 1 boilermaker position was filled by seniority-based promotion.6 The total number of mechanic trainees in each year are set forth in PX 87. Because the trainees are in a three year training program, the new trainees chosen in a given year can be roughly determined by comparing the number of trainees in one year with the number in previous years. 6 See PX 87. There were no other new pipefitter trainees selected in 1967, 1968, 1969, 1970 or 1972. In 1971 Gulf added eight mechanic trainees, but seven of them were minorities promoted as the result of the 1971 conciliation agreement with the Interior Department. 10 Second, the adverse impact of the Stipulation 29 reclassification was severe. Under the pre-1967 seniority system the overwhelming majority of the most senior mechanical helpers and utility men, considered as a group, were black. After 1967, when the helper position was abolished and craft jobs were opened to bidding by almost all workers in the plant, blacks constituted over 40% of the senior bidders.7 Among the 203 individuals reclassified into craft positions under Stipulation 29, however, only 9, or 4.4%, were black.8 In addition, the benefits of Stipulation 29 were not extended to all craft helpers. The district court apparently believed that all craft helpers were reclassified as mechanic trainees. (RE 34) . In fact, however, the very terms of Stipulation 29 are expressly limited, extending to "[a]11 employees in the mechanical sections ... excluding employees in the Bathhouse Attendant, Truck Driver, Lift Truck Operator, Truck Driver Special, and Truck Driver Electrical classifications." (Class Cert. Ex. B-2). With the exception of the Bathhouse Attendant position which contained relatively few DX 131; PX 25. Among the 68 senior bidders eligible to take the Old Test between 1969 and 1971, 23 were black. PX 9 lists all helpers who took the Stipulation 29 simple test. Only one of them, a white, failed the test.(PX 13) . 11 employees, 100% of the employees in the excluded classifications were black.9 (4) Bona Fides of the Seniority System In 1965, as today, promotions to better paying operations jobs10 were made on the basis of the Gulf-OCAW seniority system. As of 1965 virtually all the workers in the Labor Division were black, while the Operating and Mechanical or Operating and Maintenance Division, where all the better paying jobs were found, was overwhelmingly white.11 Under the terms of the seniority system blacks in the Labor Division could bid only on the lower paid entry level O & M positions; when vacancies in the best paid O & M jobs arose, only certain existing O & M employees could apply. As of 1965 there were 85 different 0 and M jobs paying over $3.50 per hour; blacks were eligible to bid on only 13 of these. (PX 37, 38). Because of these rules it was not until many years after the effective date of Title VII that black workers were permitted to bid on the best paying 0 and M operations jobs, or to use their plant seniority to reach their rightful places, holding positions comparable to whites of 9 JX 96; JX 98. 10 The discussion which follows is also applicable to the seniority rules governing selection for craft jobs represented by unions other than the OCAW. Gulf workers outside of these crafts are not permitted to use their seniority if they applied for these jobs, despite the fact that black Gulf employees have long worked on several of the crafts involved. See pp. 35, infra. 11 The Port Arthur refinery was divided into two major divisions: Labor and Operating - Mechanical ("O & M") . It is this latter Division to which the district court repeatedly but incorrectly refers as the "Craft Division." Within the divisions were departments which contained lines of progression or LOP's. DX 30. 12 similar seniority. Between 1965 and 1970, for example, Gulf promoted a total of 47 workers into No. 1 operator jobs, the best paid operating position; despite the fact that there were large numbers of blacks with many decades of seniority at the refinery, only one of these promotions went to a black. (DX 98). The seniority system at the Port Arthur refinery was structured so that the actual operation of the refinery itself was not segregated. (RE 24) . Blacks were permanently assigned to work with whites at each of the various facilities at the refinery, as well as on most of the crafts. (Tr. 649-59). The separation between blacks and whites existed only on paper in the provisions of the seniority system. As of 1965 there were blacks in almost all of the well paid O & M departments, and these black employees were actually listed as members of these departments. But blacks and whites who worked together day in and day out were, for seniority purposes, in completely separate "divisions." All blacks in the plant, no matter how unrelated their work, were in the Labor Division, and all whites in the plant, regardless of their job responsibilities, were in the Operating and Maintenance Division. The contours of this seniority system reflected, not where employees worked or what they did, but the color of their skin. The precise manner in which the Port Arthur refinery system emerged can be ascertained by comparing the seniority rosters for 1950 and 1960. (JX 34, 36); the table of contents for each of those rosters is reproduced in the Record Excerpts (RE 70-71). In 1950 there were a total of thirty-five departments at the 13 refinery. Of these, four were non-OCAW crafts,12 six corresponded to what are present OCAW crafts, 13 twenty-three were operations units, and there was a separate labor department. But most blacks were not listed in the labor department at all, but were included instead in four of the craft departments and sixteen of the operations departments. Black workers in these craft and operating departments performed many of the same tasks as whites and at times trained newly hired white workers.14 In the twenty integrated craft and operations departments, however, there were two distinct seniority rosters, one denoted "white" and one denoted "colored." (RE 70). In 1950, of course, a black employee in the boilermaker, waste oil, or machine shop department could not bid on the better paying jobs in those units. Such a black employee had far more relevant experience than a white from some other department, but jobs were allocated on a strictly racial basis; a black man in a "colored" job in the waste oil department was forbidden to bid on a "white" job in that department. (RE 24) . In 1950, during an era of open discrimination, there was no pretense that this restriction was based on anything but race. By the time of the 1960 seniority roster whites and blacks were separated into the virtually all-white O & M Division, and 12 Bricklaying, electric shop, machine shop, and transportation. 13 Boiler shop, carpenter, shop, instrument, insulating, paint shop, pipefitting, welding. 14 Tr. 109-10, 112, 157, 219-20, 340-41, 348-49, 521, 1158-68, 1179-82, 1184-85, 1199, 1212, 1217-18, 1276, 1279. 14 the all-black Labor Division. But these divisions did not reflect any actual redistribution of black and white workers within the refinery. On the contrary, the number of craft and operating departments with black employees remained unchanged. Hundreds of black employees continued to actually work either at crafts or at an operating facility, and the jobs they performed were the same. All that changed between 1950 and 1960 was that the heading of the lists of positions held by blacks was altered in the seniority roster from "colored" to "Labor Division" and the heading of the lists for whites was changed from "white" to "Operating-Mechanical Division." The contours of the Labor Division were exactly the same as the old "colored" roster, and fell along racial rather than work related lines. Throughout the refinery whites and blacks who worked every day side by side at the same facility or craft were technically in separate divisions; on the other hand, whites in 29 different departments, employees whose work was totally unrelated, who had no understanding of one another's jobs, and who had entirely distinct skills and experiences, were all technically in the same division. In at least some instances, if a black succeeded in promoting into an O & M job, his job would then be transferred to the Labor Division, even though a white doing the same job would remain in the 0 & M Division. (Tr. 1217-18). The separation of related jobs on the basis of race was not limited to positions represented by the OCAW. As of 1960 there were 2 0 bricklayers and 1 bricklayer helper, all white, in the Bricklayers Department who were represented by the Bricklayers 15 Union. (JX 40, pp. 4-5) . But the Bricklaying Department also had 30 other workers whose job was "utility man special bricklayer helper," and all of these employees were black. Despite the fact that the white bricklayers and the black bricklayer helpers obviously worked together on related tasks, the white bricklayers were in the O & M Division, and were represented by the Bricklayers Union, while the black bricklayer helpers were in the Labor Division and were represented by the OCAW. Similarly, although the white employees in the Machine Shop Department were in the O & M Division and were represented by the International Association of Machinists, the black employees in that Department were in the Labor Division and were represented by the OCAW.15 Other events surrounding the emergence of separate Labor and O & M Divisions confirm the racial motives of those who framed that system. Prior to 1954, as the district court noted, there was an unwritten understanding at the Port Arthur refinery that blacks were not to bid on positions designated in the seniority roster as "white" jobs. (RE 24) . In 1954 a black worker violated that unwritten rule and bid on a white job. (Tr. 963). Company officials called in union representatives and admonished them "you have got a problem." (Tr. 1000). The written rules in 1954 literally permitted such bids by blacks; had the official selection rules then in effect been retained, blacks willing to bid on white jobs would have won a large proportion of those 15 JX 40, pp. 81, 125-26; Tr. 152, 317, 1022, 1173-78, 1184-85, 1216-17. 16 positions, since there were hundreds of relatively senior blacks in low paid "colored" jobs. Faced with the danger that blacks would seek to utilize seniority rules originally intended only for whites, the company and union agreed to suspend all promotions for an extended period. (Tr. 1001-03). Promotions did not resume until Gulf and the OCAW had agreed upon a completely new set of seniority and promotion rules, which effectively assured that no black, regardless of his experience, could ever win a promotion which had been sought by a white. The new rules were restrictions on any employee seeking to transfer from the Labor Division to the 0 & M Division. As was noted above, these "divisions" were simply new designations for the black and white jobs in each department. An employee in the black Labor Division was barred from bidding on an 0 & M job unless none of the 0 & M workers, virtually all of them white, wanted the position. No employee was permitted to move from the Labor Division into the 0 & M Division unless he or she had a high school degree, and could pass a written examination. (RE 24-25 n. 2; Tr. 24-25, 1194-95). The whites in O & M, on the other hand were free to transfer between departments even though they lacked a high school degree and had never passed the test. Almost half of all white O & M workers lacked a high school degree,16 and none had been required to take any test when they were hired. The white O & M employees as of 1956 were effectively grandfathered out of these two requirements. In addition, any employee transferring from a Labor to an O & M job 16 PX 17, 19, 20, DX 97, 107. 17 was, for promotion purposes, stripped of all but one day of his seniority. (RE 26) . Prior to 1956 promotions were made on the basis of plant seniority; under the new rules a black who moved into an 0 & M job could not thereafter rely on his plant seniority to win promotions; the seniority of such an employee was computed from the day he entered the 0 & M Division. This rule was based on divisional rather than departmental seniority. A black employee with 10 years experience in a "colored" job in Package and Grease lost all that seniority if he moved into a white job in that same department, but a white employee with ten years experience in a completely different department could use that seniority to compete for promotions in the Package and Grease department. As a practical matter the one-day rule effectively assured that, among employees hired before 1956, a black would never win a promotion unless no eligible white bidder wanted the job. (5) Promotions To Supervisory Positions Each year Gulf selected a number of hourly employees for promoting to supervisory positions. The selections themselves were made through a closed, almost secretive process. No notices were posted regarding the occurrence of vacancies, and no procedure existed by which a worker could apply for such a position. This informal covert selection process continued until 1982, when Gulf adopted a more formal and open procedure.17 The number and proportion of blacks promoted to supervisory positions were as follows: 17 Tr. 66-70, 356-57, 748-49. 18 Promotions to Supervisor (PX 16) Period Whites Blacks Proportion of Blacks 1965-70 35 1 2.9% 1971-76 70 6 8.5% 1977-82 104 15 14.4% Blacks constituted 11.35% of the workers in the highest non- supervisory positions, the No. 1 jobs, (RE 42) and about one- fifth of the plant's total workforce. (Tr. 760) . Plaintiffs offered evidence regarding Gulf's failure to promote a number of experienced black employees (Tr. 236-40; PX 93, pp. 2-3; Tizeno Dep. Exhibit 22). The district court incorrectly held that the Title VII prohibition against practices with a disparate impact is inapplicable to tests in use before 1975. The test overturned in Albemarle Paper Co. v. Moodv. 422 U.S. 405 (1975), was a pre-1971 test. The defendants failed to demonstrate that their present promotion test, which has a severe adverse impact on blacks, is job related. The company's "validation" study was admittedly based on skills other than the actual skills which Gulf's supervisors regarded as important to the jobs at issue. The district court's finding that the seniority system was bona fide is clearly erroneous. That seniority system systematically separated into two distinct "divisions," for seniority purposes, blacks and whites who in practice worked together in the same department. The all-black Labor and all- SUMMARY OF ARGUMENT 19 white 0 & M divisions that existed in 1965 were simply groupings of the same jobs referred to in 1950 as "colored" and "white," and those divisions were structured to place together employees of the same race, not employees with related duties. In analyzing evidence of discrimination in the • selection of supervisors, the district court erred in lumping together all promotions made between 1965 and 1982. Blacks accounted for 15% of the promotions to supervisor between 1977 and 1982, but only 3% of the promotions between 1965 and 1970. The district court erred in excluding from the class persons who executed releases. The district court ignored the legal standards applicable for determining the effectiveness of a release under Title VII. 20 ARGUMENT I. GULF'S CRAFT PROMOTION TESTS WERE NOT JOB-RELATED The district court below correctly concluded that both Gulf's Old Test and its New Test had a substantial adverse impact on blacks seeking promotions to craft positions. Once the plaintiffs in a Title VII case establish the existence of such an adverse impact, the burden shifts to the defendant to establish that the test at issue is job related. Griggs v. Duke Power Co.. 401 U.S. 424 (1971). (1) The Old Test The district court held that, as a matter of law, Gulf was not required to validate the Old Tests. The district judge's analysis of this issue was as follows: So far as the Old Tests are concerned, Gulf was not required to validate them, for the reason that the Old Tests were eliminated four years before Albemarle Paper Co. v. Moody. 422 U.S. 405 (1975), imposed validation requirements; and seven years before The Equal Employment Opportunity Guidelines in Employee Selection Procedures instigated validated studies. (RE 37 n.4). The district court evidently believed that at least until the 1975 decision in Albemarle it was legal to use a non-job related selection criteria with an adverse impact on minorities. The prohibition against such selection criterion dates from 1965, the effective date of Title VII, not from the 1975 decision in Albemarle. In Griggs v. Duke Power Co.. 401 U.S. 424 (1971), the Supreme Court held that "[i]f an employment practice which operates to exclude Negroes cannot be shown to be related to job performance, the practice is prohibited." 401 U.S. at 431. 21 Griggs did not adopt some new legal principle to be applied only to post 1971 selections; on the contrary, the test at issue in Griggs had been adopted in 1965, and the case had been tried by 1968. 4 01 U.S. at 428. The Supreme Court in Griggs relied on EEOC Guidelines on Employment Testing Procedures, prohibiting the use of non-job related tests, which had been issued by EEOC in 1966. The Supreme Court's decision in Albemarle did not, as the district court believed, establish some new requirement for post 1975 employment practices. Albemarle's analysis of the legal issues was based largely on Griggs; indeed, one of the two tests held unlawful in Albemarle was the same test that had been in dispute in Griggs. Compare Griggs. 401 U.S. at 428 with Albemarle. 422 U.S. at 428 (Wonderlic test). Equally significant, the complaint in Albemarle had been filed in 1966 and the case had been tried in 1971. 422 U.S. at 408-09. The Supreme Court in Albemarle expressly held that an award of back pay for the unlawful use of a test during that period was not only proper but ordinarily mandatory. 422 U.S. at 413— 25. This court has repeatedly held unlawful the application of selection criteria in use in the years prior to Albemarle and Griggs. Local 53 v. Vogler. 407 F.2d 1047 (5th Cir. 1969); Local 189, United Papermakers & Paperworkers v. United States. 416 F.2d 980, 989 (5th Cir. 1969); United States v. Georgia Power. 474 F.2d 906 (5th Cir. 1973); Pettway v. American Cast Iron Pipe Co.. 494 F.2d 211 (5th Cir. 1974); Johnson v. Goodyear Tire & Rubber Co.. 491 F .2d 1364 (5th Cir. 1974). 22 (2) The New Test Where, as here, plaintiffs establish that a test has an adverse impact on minorities, the burden shifts to the employer to demonstrate that the test at issue is business related. Bunch v. Bullard. 795 F.2d 384 (5th Cir. 1986). The job-relatedness of a test may be established in a variety of ways. One type of analysis is criterion validation, in which the test scores of actual employees are compared with their job performance on the job at issue. To satisfy an employer's burden a criterion validation study must meet two essential requirements. First, the study must be based on "important elements of work behavior which comprise or are relevant to the job or jobs at issue." EEOC Guidelines, 29 C.F.R. § 1607.4(c), quoted with approval in Albemarle Paper Co. v . Moody. 422 U.S. at 431. Second, the study must demonstrate that the tests are "shown, by professionally acceptable methods, to be 'predictive of or significantly correlated with'" those elements. Id. In this case neither requirement was met. (1) As part of its validation study of the New Tests, Gulf directed supervisors at the Port Arthur plant to rate the relative importance of 117 duties which certain craftsmen might perform. (DX 162) . In the case of boilermakers, for example, Gulf's supervisors reported that the 10 most significant work elements, in order of importance, were as follows: (1) Using common hand-held non-power tools; (2) Following safety procedures; (3) Working at heights over 4 feet; (4) Using common hand-held power tools; (5) Working as a member of a team; (6) Carrying out simple oral instructions; 23 (7) Working outside; (8) Using handling and lifting devices; (9) Repairing frames and platforms; (10) Maintaining clean work area.18 Rather than use this empirically based list of important duty elements, however, Gulf based its validation study instead on a completely different list of traits, somewhat misleadingly labeled "performance elements." These so-called "performance elements" had virtually nothing in common with the actual duties which the supervisors reported were performed by craftsmen. For example, among the 24 "performance elements" actually studied by Gulf for boilermakers, there were only two work elements regarded as important by Gulf's own supervisors— following oral instructions and working as a team.19 Many of these "performance elements" were rated as of little or no importance by Gulf's own supervisors. Thus although the validation study sought to establish a correlation between test scores and an employee's performance recording data and preparing records, Gulf supervisors evaluated those two performance elements" as 70th and 80th in importance for boilermakers. (See DX 162) . The resulting study was devoid of significance as an assessment of whether employees with high scores were actually better boilermakers, or better at some other craft. Eight of the* ten most important work elements were not evaluated at all. Conversely, 22 of the 24 elements that were evaluated were 18 DX 162; RE 38 n. 6; Tr. 1082-83. 19 Compare RE 37-38 n. 5 with id. at 38 n. 6 24 regarded by Gulf's own supervisors as unimportant or irrelevant to the work of a craftsman. The district court did not purport to find that the validation study showed high scoring test takers were better craftsmen; rather, the district court upheld the test on three other novel and unsupportable grounds. First, the district judge apparently believed that craft positions, such as boilermaker, were only entry level jobs at the bottom of various lines of progression. Craft positions such as boilermaker, the district judge reasoned, are only the first steps in a highly formalized promotion scheme. Because promotions are based entirely upon seniority, advancement in a line of progression is virtually assured. To be able to perform well in the advanced craft positions, the worker must be able to learn, or generalize, from his experience in the lower craft positions. (RE 39). The factual premise of this argument is clearly erroneous. There is no line of progression above the position of boilermaker, pipe fitter, or any of the other craft positions. See, e.g. , JX 60, p. 63. Once a Gulf employee becomes a craftsman, he ordinarily holds that position for life. There simply are no higher level positions in the various craft units, and the collective bargaining agreement forbids craftsmen even to bid on other positions. (Tr. 46-48). This factual error is one of the district judge's own making; Gulf never suggested in the district court that any such lines of progression existed. Second, the district judge objected to evaluating actual duty elements because he believed that virtually all employees could do those tasks well. [M]ost of Plaintiffs' actual duty elements involved abilities Plaintiffs should have already learned in the 25 Labor Division. For example, each aspiring craftsman had already acquired the basic "hands-on" skills in the use of tools and materials. (RE 40). The district judge evidently believed, not without reason, that an evaluation of the actual work of craftsmen would show relatively few differences, and thus no correlation with higher test scores. But if, as the judge assumed, relevant employee abilities are too similar to distinguish by means of a test, the conclusion compelled by Title VII is that the employer may not use a test, not, as the trial judge reasoned, that the employer can test instead for some skill not important to the job at issue. Third, the district judge reasoned that the tests were valid because they assessed an employee's basic intelligence, and that the same substantial conceptual skills were necessary to perform any craft job: The tests were given to insure that an employee had the rudimentary skills necessary to be put into a training program.... Although the mechanics of each vary, the conceptual and intellectual competence and intellectual competence required to perform each job is not significantly different. The carpenter, the pipefitter, the mechanic, and other craftsmen all need the ability to conceptualize three-dimensional objects on the basis of two-dimensional drawings. Each must create physical objects in accordance with written or graphic specifications. All craftsmen must understand the geometrical relationship between the things they work with and be able to think in terms of area, volume, and length. (RE 40-41). This passage is little more than an a priori assertion that smart people make better craftsmen. If a test or education requirement could be sustained on such a basis, Griggs. Albemarle and their progeny would be simply meaningless. This court has repeatedly rejected the use of general intelligence tests to select 26 craftsmen, absent substantial objective evidence that better scoring applicants are in fact better craftsmen. Watkins v. Scott Paper Co.. 530 F.2d 1159 (5th Cir. 1976); Pettwav v . American Cast Iron Pipe Co.. 494 F.2d 211 (5th Cir. 1974); James v. Stockham Valves & Fittings Co.. 559 F.2d 310 (5th Cir. 1977). (2) Even if its validation study had attempted to assess how well craftsmen actually did their jobs, Gulf was also required to demonstrate that there was an actual relationship, or correlation, between the test results and the work of the tested employees. The degree of correlation between test scores and actual success on the job is expressed, in statistical terms, by a "correlation coefficient." The value of the correlation coefficient can range from + 1.0 (workers with higher test scores always do better on the job) to -1.0 (workers with higher test scores always do worse on the job). A correlation coefficient of 0 indicates that higher scoring applicants did neither better nor worse on the job than lower scoring applicants, and that, therefore, the test did not measure anything related to job performance. In this case both defendants' and plaintiffs' experts expressly agreed that a correlation coefficient of at least + .30 to .40 was necessary to establish the validity of a test. (Tr. 1043, 1303). "The courts have commonly not accepted as valid a test having a correlation coefficient of under .30" B. Schlei and P. Grossman, Employment Discrimination Law. 129 (2d ed. 1983). The decisions of this court require a correlation coefficient of that magnitude. Riviera v. City of Wichita Falls. 665 F.2d 531, 27 537-8 n. 9 (5th Cir. 1982) (upholding test with correlation of .38); Enslev Branch of NAACP v. Seibells. 616 F.2d 812, aff'q in part and rev'q in part 14 FEP Cas. 670, 681-82 (N.D. Ala. 1977) (upholding portion of study yielding correlation coefficient in excess of .30, but rejecting portion of study yielding correlation of only .25). Indeed, the greater the adverse impact of a test, the higher will be the required showing of job relatedness. 29 C.F.R. § 1607.14(B)(6) (1981), Guardians Ass'n of New York Police Dep't v. Civil service Comm'n. 630 F.2d 79, 105-06 (2d Cir. 1980). Plaintiffs urged in the court below that Gulf's validity study did not meet the .30 standard;20 the district judge inexplicably failed to address this issue. (See RE 37) . In this case Gulf sought to rely on its 1983 study to establish the validity of its test for selecting applicants for two different craft positions, boilermaker and pipefitter. Under the Gulf study each boilermaker was rated separately by two different supervisors, as was each pipefitter. Thus the initial result of the study was to yield two correlation coefficients for boilermakers, and two for craftsmen, based on the somewhat Idifferent ratings of the various supervisors involved. The unadjusted correlation coefficients were .14 and .26 for pipefitters, and .23 and .26 for boilermakers. (DX 162, p. 38). Thus the initial results of the validation showed correlation coefficients consistently lower than the .30 to .40 level which 20 Plaintiffs' Proposed Findings of Fact and Conclusions of Law, pp. 34-40, 72-74. 28 Gulf's own experts conceded was necessary to estal validity of a test. (3) Finally, the record is undisputed that approximatexy two-thirds of the employees who became craftsmen between 1947 and 197 0 — a group that was virtually all white — never took the Old Test at all.21 These individuals continued to occupy craftsmen positions long after the New Test was instituted and have performed well. Indeed, Gulf's key personnel supervisor insisted that the employees who became craftsmen without taking either test were indistinguishable in ability and job performance from those who took and passed either the New or Old Test. (Tr. 29-31). This testimony demonstrates clearly that neither test was in fact necessary for the selection of competent workers and, therefore, their use violated Title VII. See Griggs v. Duke Power. 401 U.S. at 431-432. II. GULF ENGAGED IN INTENTIONAL DISCRIMINATION IN DENYING PROMOTIONS BASED ON SICKNESS AND ACCIDENT Plaintiffs offered undisputed evidence that Gulf officials, in exercising their subjective authority to deny promotions based on sickness and accident, rejected blacks at a rate 50% higher than whites. (PX 29) . The district court did not question the accuracy of those statistics, but nonetheless rejected this claim 21 The exemptions from the Old Test were made in two large groups. In 1956 Gulf and the OCAW agreed to Stipulation 30, which permitted a substantial all-white group of O & M workers to promote into craft position without taking any test just before the exclusion of blacks from the O & M division was ended. In 1967 a total of 203 employees were promoted into craft position under Stipulation 29. These workers were given a simnplified special test; of the 204 workers who took that Simple Test only 1 failed. Tr. 31, 984-85; PX 9, 13. See also PX 23, DX 94. 29 of intentional discrimination in a single sentence: "Gulf's S and A policy was applied equally to blacks and whites." (RE 42). This circuit has repeatedly held that, where a plaintiff has presented evidence of purposeful discrimination, "a conclusory one sentence finding that merely brushes the evidence aside cannot stand." Chaiffetz v. Robertson Research Holding. 798 F.2d 731, 734 (5th Cir. 1986). If the trial court believes the employer's explanation of its motivation, the court may not merely state, in conclusory terms, that the plaintiff has failed to prove . . . discriminatory treatment. It must at least refer to the evidence tending to prove and disprove the merits of the proffered explanation and state why the court reached [its] conclusion.... Ratliff v. Governor's Highway Safety Program. 791 F.2d 394, 400- 01 (5th Cir. 1986) (footnote omitted). Those statistics together with evidence of specific apparent disparities in the treatment of individual blacks and whites were sufficient to create a prima facie case of intentional discrimination. Pavne v. Travenol Laboratories. 673 F.2d 798 (5th Cir. 1982), cert. denied. 459 U.S. 1038 (1983). The discretionary evaluation of sickness and accident records constituted the sort of "subjective standardless decision-making by company officials" that often "is a convenient mechanism for discrimination." Bunch v. Bullard. 795 F.2d 384, 398 (5th Cir. 1986), citing Bovkin v. Georgia-Pacific Coro.. 706 F.2d 1384, 1390 (5th Cir. 1983), cert, denied. 465 U.S. 1006 (1984). Gulf might have rebutted that prima facie case in either of two ways. First, Gulf might have offered proof that a higher percentage of black senior bidders than white senior bidders had 30 missed 80 hours of work in the previous year, and were thus subject to scrutiny. Second, Gulf might have sought to prove that, among the scrutinized senior bidders, the S and A record of blacks during the previous year was on the average substantially worse than that of whites. The sole evidence offered by Gulf in this issue, however, consisted of an analysis of the total S and A hours of blacks and whites who were rejected. (Tr. 1240). That analysis showed that rejected black senior bidders had on average been sick or ill a total of 28 days, while rejected whites missed an average of 24 days. (Tr. 1238). But these figures represented the total number of absences during the workers entire career at the refinery; in their actual evaluation of S and A records, on the other hand, Gulf officials were concerned with a worker's record in the previous year, or, at most, in the worker's average absence per year. (RE 41). Indeed, it would have been irrational for Gulf to reject a bidder who had missed comparatively few days per year solely because he had been at the refinery for many years, and thus had a higher overall S and A total. Because of the long period of pre-act discrimination, blacks with several decades of seniority were bidding on craft jobs long after the whites with similar seniority had reached those positions. The meager rebuttal evidence offered by Gulf was insufficient to overcome plaintiffs' prima facie case. Even if this court believes Gulf's evidence might have been sufficient to meet that burden, the disposition of this claim should be 31 reversed and the case remanded with instructions that the trial court provide an evaluation of the evidence sufficiently detailed to permit meaningful appellate review. Compare Chaiffetz v. Robertson Research Holding, supra. III. THE DEFENDANTS UNLAWFULLY ABROGATED THE SENIORITY RIGHTS OF BLACKS Under Griggs v. Duke Power Co.. 401 U.S. 424, a prima facie violation of Title VII may be established by proof of the existence of "policies or practices that are neutral on their face and in intent but that nonetheless discriminate in effect against a particular group." The Stipulation 29 reclassification had an undeniable adverse impact on black employees. The 4.4% of the promotions which went to blacks under the reclassification was far lower than' the proportion of blacks among senior utility men, the proportion of blacks among senior employees throughout the refinery, or the proportion of blacks among the entire plant workforce. The selection rule that specially created 200 craft positions and restricted them to a virtually all white group was not based on seniority or "length of employment" at the plant or in a particular division. Cf. California Brewers v. Brvant. 444 U.S. 598, 606 (1980). On the contrary, the helpers "reclassified" into craft jobs invariably had less seniority than scores of black utility men. At all other times since 1965, both before and after Stipulation 29, employees have been able to rely on their seniority in competing for desirable positions. The 1967 "reclassification" of 203 employees into craft positions both abrogated the seniority rights of blacks ordinarily entitled to 32 seek those positions, and had an adverse impact on that minority group. Although Gulf sought to explain its decision to abolish the helper position, it offered no justification for simply reclassifying the helpers as craftsmen, rather than requiring former helpers, as in the past, to compete for craft jobs on the basis of seniority. Indeed, Gulf insisted that the company's only interest was in abolishing the helper position, and that the reclassification had been proposed by the union, which wanted "life time jobs" for the 203 helpers, (almost all of them white) "reclassified" under Stipulation 29. (Tr. 731-32). In the absence of any business necessity, the 1967 reclassification violated Title VII as a matter of law. In this case plaintiffs complain that the practice with discriminatory impact was the abrogation of their pre-1965 seniority rights. Unlike the circumstances in Teamsters v. United States. 431 U.S. 324 (1977) and American Tobacco Co. v. Patterson, 456 U.S.63 (1982) where there was a conflict between the congressional policy of respecting seniority rights and the congressional policy against practices with discriminatory effects, here those two policies coincide. A practice which adversely affects blacks by abrogating their seniority rights conflicts with both of the policies at issue in Teamsters and its progeny. If, as Griggs and Teamsters hold, Title VII is presumptively violated by a practice, not based on seniority rights, that has a discriminatory effect, a fortiori a prima facie violation occurs where a defendant adopts a practice which 33 not only has such a discriminatory effect but also actually abrogates the seniority rights of blacks. IV. THE SENIORITY SYSTEM WAS NOT BONA FIDE22 The seniority rules at the Gulf refinery, except for the seniority rights abrogated by Stipulation 29, generally had a discriminatory impact on senior black employees for many years after the effective date of Title VII. The district court correctly recognized that those seniority rules could not be upheld under Title VII unless the defendants could meet their burden of establishing that the seniority system was bona fide. (RE 27). Teamsters; James v. Stockham Valves & Fittings Co.. 559 F.2d 310 (5th Cir. 1977). To establish that affirmative defense the defendants must prove that neither the genesis nor the maintenance of the seniority system were tainted by a discriminatory purpose. The facts regarding the contours of the seniority system are not in dispute; the district court correctly found that under that system there were black Labor Division employees working in almost all of the operating and craft departments in the plant. (RE 24) . The district court's finding, and the facts underlying it, we urge, are sufficient as a matter of law to compel the conclusion that the seniority system was not bona fide. The seniority system in this case is an even more egregious example of the sort of system held unlawful in Terrell v. United States Pipe & Foundry Co. . 644 F.2d 1112 (5th Cir. 1981). In this case the existence of separate black and white jobs pre-date 22 See note 10, supra. 34 the creation of the so-called Labor and Operating and Maintenance Division. The original separation of black and white jobs within 20 different departments was expressly racial in nature; black workers in a given department, no matter how great their experience and skill, were outside the white line of progression and could not bid on white jobs in their own department, whereas inexperienced whites from completely unrelated departments were free to bid on and promote into the white jobs. Some dispute exists regarding how this racial restriction was enforced, but neither the defendants nor the district court suggested that the promotion practices as they actually existed in 1950 were non- discriminatory. The seniority system that had emerged by 1960 differed in little more than name from the original race-conscious system. The grouping of employees into two separate general divisions is neither unlawful nor suspicious per se. But in the instant case the division line largely ignored the actual departmental structure at the refinery. Employees working side by side in the same department were placed in separate divisions, while employees in totally unrelated departments were in the same division. Such a system, disregarding an employer's interest in placing together for seniority purposes employees who worked at the same unit or facility, would by itself be quite suspect. But here the boundaries of the new division system were precisely the same as the old "white" and "colored" jobs system. Within the twenty departments split among two divisions, blacks and only blacks were placed in the Labor Division, while whites and only 35 whites were placed in the O & M Division. The structure of the seniority system as it existed in 1965 was essentially the same as the race-conscious 1950 system. Although the testing and one-day rules were rescinded in 1963, and the high school degree rule was rescinded in 1971 under pressure from the federal government, the initial adoption of those restrictions throws considerable light on the purpose behind the seniority system. The 1956 promotion restrictions graphically demonstrate, as did Stipulation 29, that Gulf and the OCAW, although steadfastly adhering to seniority rules harmful to blacks, were ready and willing to take unprecedented and drastic steps to modify seniority rules where those seniority rules threatened to work to the advantage of blacks.23 23 The district judge argued that the three new restrictions were facially neutral, harming to blacks as well as to whites who might be in the Labor Division, and benefitting all workers regardless of race who had been originally hired into what was in 1956 called an 0 & M job. (RE 25, 29). In fact, however, there were no whites in the Labor Division, nor were there blacks in the O & M Division. It is difficult to see how these rules can even be characterized as facially neutral. The restrictions were expressly directed at all employees holding what were, at least until 1950, "colored" jobs; had the restrictions been adopted in 1950, and applied to transfers out of "colored" jobs, those rules clearly would have been racial. Surely the result is no different merely because Gulf had altered the terminology of its seniority rosters from "colored" to "Labor Division." The district judge also reasoned that "[t]he purpose and effect of the [one-day] rule was to maintain the most qualified persons in their respective technical Craft Division positions." (RE 29). The district judge evidently assumed that the effect of the one day rule, like a departmental seniority rule, was to give preference in promotions to individuals with the greatest relevant technical experience. But the effect of the one-day rule was precisely the opposite. An employee's years of experience in his particular department were literally irrelevant. If a black with 20 years experience in a "colored" job in Package and Grease applied for a promotion within a white 36 V. GULF ENGAGED IN INTENTIONAL DISCRIMINATION IN MAKING PROMOTIONS TO SUPERVISORY POSITIONS The plaintiffs asserted at trial that Gulf engaged in racial discrimination in selecting those hourly employees whom it promoted to supervisory positions. Between 1965 and 1970 only 1 of the 35 workers promoted to a supervisory position was black; until 1977-82 the proportion of these promotions being awarded to blacks remained less than half of the proportion of blacks at the refinery. (PX 16). Gulf did not offer any response to the evidence of individual acts of discrimination, and did not suggest that plaintiffs' statistical evidence was inaccurate. Rather, Gulf argued that the district court should consider only Gulf's total record over the 17 years from 1965 to 1982, rather than focus on the first decade when virtually no blacks were promoted to supervisor.24 The district court accepted this contention, refusing to consider, for example, whether there might have been discrimination during part but not all of that 17 year period. (RE 42). line of progression, he would always be rejected in favor of a white from some unrelated department who had been in Package and Grease for only a year, since the black, but not the white, would have forfeited his seniority when he entered that white line of progression. Such a system of preferring inexperienced whites over experienced blacks is inexplicable except in racial terms. The district court attached some importance to the fact that any white hired between 1956 and 1963 would have been required to take the test. (RE 25). In fact, however, there was virtually no hiring at the Port Arthur refinery between 1956 and 1963. Tr. 790-92; PX 32, 34; cf. Tr. 315-16. 24 Gulf's Proposed Findings of Fact and Conclusions of Law, p. 58. 37 The district court erred as a matter of law in lumping together all promotions made over a 17 year period. The record makes clear that Gulf's promotion practices were far different in 1982 than they had been in 1965 or 1970. If Gulf in selecting supervisors discriminated against blacks between, for example, 1965 and 1975, it would be no defense to that practice that Gulf's record became significantly better after this action was filed in 1976. "Such actions in the face of litigation are equivocal in purpose, motive and permanence." Jenkins v. United Gas Corp. , 400 F.2d 28, 33 (5th Cir. 1965). See also James v. Stockham Valves & Fittings Co. . 559 F.2d at 325 n. 18 (5th Cir. 1977) . Gulf's improved post-197 6 record is clearly insufficient to overcome the overwhelming statistical evidence of discrimination prior to the filing of this action. On remand the district court will be required to determine when, if ever, Gulf ended the practice of discrimination which existed prior to the commencement of this action. In doing so the lower court should be directed to make more explicit findings regarding the positions from which supervisors were selected. Gulf urged below that the court should consider only employees in the No. 1 or highest level in each unit. The district court, however, noted that promotions had not been strictly limited to this group, finding only that Gulf "generally promoted upper level employees ... to supervisor." (RE 42). The record indeed demonstrated that Gulf selected its supervisors from among workers who did not hold the No. 1 job, and that Gulf in some instances actually selected lower level employees for supervisory 38 positions. (Tr. 112, 156, 1237, 377; PX 98, 100). Although blacks were 11.35% of the No. 1 employees, they constituted almost twice that proportion of Gulf's overall workforce. In light of its finding that supervisory promotions were not in fact strictly limited to workers holding the No. 1 position, the district court should be instructed to make a specific and reasoned determination as to the percentage figure to be used in comparison with the actual rate of promotions. VI. UNION LIABILITY The district court correctly concluded that the liability of the defendant unions depends on the merits of plaintiffs claims. (RE 43-44). Specifically, union liability turns on whether the disputed seniority system was bona fide, and on whether Stipulation 29 of the 1967 OCAW contract, insofar as it abrogated pre-existing seniority rights of blacks, violated Title VII. Accordingly, if this court reverses the trial court's disposition of either of these issues, it should reverse as well the decision of the district court regarding union liability. VII. THE DISTRICT COURT ERRED IN ITS RULING ON INDIVIDUAL CLAIMS Most of the claims of the individual plaintiffs are controlled, by the disposition of the claims of classwide discrimination. Plaintiffs Bernard, Brown and Johnson were denied promotions because of the tests. Plaintiffs Bernard and Tizeno complain that their seniority rights as utility men were abrogated by Stipulation 29. Plaintiff Tizeno argues that his ability to promote into better paid operations positions was impeded by the disputed seniority system. Plaintiffs Bernard, 39 Hayes, and Tizeno allege they were purposefully denied promotions to supervisor because of their race. (RE 46-49). Reversal of any of the district court dispositions of the class claims would require reversal as well of the related individual claims. Donaldson v. Pillsburv Co. . 554 F.2d 825 (8th Cir. 1977) cert, denied. 434 U.S. 856 (1977); Griffin v. Carlin. 755 F.2d 1516 (11th Cir. (1985) . In rejecting the claims of plaintiffs Hayes and Brown that they were unlawfully denied supervisory positions, the district court held they had failed to establish a prima facie case because they never "applied" for such a position. (RE 46-47) This holding was erroneous for several reasons: there simply was no application process at the Port Arthur refinery; the existence of vacancies was never announced prior to 1982, and Gulf simply solicited supervisors on a word-of-mouth basis. (Tr. 66-70). Having proceeded in this manner, Gulf cannot reasonably complain of a lack of applications from blacks. [W]hen an employer uses such informal methods it has a duty to consider all those who might be reasonably interested, as well as those who have learned of the job opening and expressed an interest Carmichael v. Birmingham Saw Works. 738 F.2d 1126, (llth Cir. 1984) . Because the district judge saw no evidence of cl-asswide discrimination, the trial court believed black employees had no reason to be deterred from applying for supervisory positions. (RE 47). That argument highlights the flaw in the lower court's view that Gulf's varying promotion records over the 17 years from 1965 to 1982 should all be lumped together. A black employee interested in a promotion in 1975 might reasonably have been 40 deterred by the fact that only three blacks had been promoted to supervisor in the nine years since the adoption of Title VII; it is clearly wrong to suggest that such deterrence in 1974 was unreasonable because Gulf subsequently promoted 19 blacks to supervisory positions over the nine years that followed. (See PX 16) . Plaintiff Tizeno did learn of the existence of a particular supervisory position, and did make known his desire to be promoted. Gulf offered no testimony to provide any explanation for denying Tizeno the promotion, and Tizeno concededly had more than twice the departmental experience of the white actually awarded the job.25 The district court did not question Tizeno's qualifications, but held Tizeno had failed to establish even a prima facie case because he "offer[ed] no evidence that he was better qualified [than the white] for that position." That holding was wrong as a matter of law; a Title VII plaintiff denied a job or promotion is required, as part of his or her prima facie case, to prove only that he or she was qualified for the position at issue, not that he or she was better qualified than the successful white applicant. Moreover, if a defendant does not assess qualifications in the first instance, it cannot rebut a prima facie case by asserting lesser or no qualification. 25 deposition. See PX 93, p. 2; PX 94, pp. 12-24; Exhibit 20 to Tizeno 41 Lams v. General Waterworks. 766 F.2d 386, 393 (8th Cir. 1985); Nantv v. Barrows. 660 F.2d 1327, 1332 (9th Cir. 1981). VIII. THE DISTRICT COURT ERRONEOUSLY RESTRICTED THE SCOPE OF THE PLAINTIFF CLASS The district court originally certified a plaintiff class consisting of all black persons who either applied for or were employed in union jobs at Gulf's Port Arthur refinery on or after December 26, 1966. In a memorandum order issued on the eve of trial, however, the court narrowed the plaintiff class by excluding employees who had signed releases pursuant to a conciliation agreement negotiated between Gulf and the EEOC, id. at 57-59.26 This decision to restrict the class was erroneous. The district court stated that "[t]he evidence in the record in no way leads the court to question the legality of the releases." RE 57. This statement forms the linchpin of the 2 6The district court also excluded two other groups originally included in the plaintiff class: unsuccessful applicants for employment, RE 55, and members of unions other than OCAW, id. at 55-56. Plaintiffs are not appealing the district court's exclusion of applicants from the plaintiff class. With respect to the exclusion of members of other unions, however, the district court misunderstood the nature of plaintiffs' claims. Plaintiffs did not claim that the craft unions discriminated against their own members. Rather, they claimed that the craft unions applied their seniority rules in a manner that "had the effect of preventing or deterring blacks in the OCAW from moving into those craft unions and job." Plaintiffs' Memorandum in Response to Defendants Motion to Modify the Class at 6 (emphasis added). Thus, plaintiffs named these other unions as defendants because the alteration of their intentionally discriminatory seniority rules might be necessary to afford the class of OCAW workers full relief. Cf. Fed. R. Civ. P. 19 (joinder of necessary parties). The issue of the other unions' presence in this lawsuit is therefore unrelated to the class certification issue, and the district court's order dismissing them as defendants should therefore be reversed. 42 district court's analysis, since the presence of effective releases provides the only articulated basis for the court's conclusion that the named plaintiffs and the employees who had signed releases (the "signatories") are not similarly situated. The approach taken in the memorandum opinion is entirely inconsistent with the established legal standard for determining the effectiveness of the waiver of a claim under Title VII. The Supreme Court has made clear that, although "an employee may waive his cause of action under Title VII as part of a voluntary settlement," a court faced with an employer's assertion that a claim is barred by such a waiver must "determine at the outset that the employee's consent to the settlement was voluntary and knowing." Alexander v, Gardner-Denver Co. . 415 U.S. 36, 52 & n. 15 (1974). As explained by this Court, a trial court should "'indulge every reasonable presumption against waiver.' To be effective, a waiver 'not only must be voluntary, but must be knowing, intelligent and done with sufficient awareness of the relevant circumstances and likely consequences.'" Mosley v. St. Louis Southwestern Railway. 634 F.2d 942, 946, n. 5 (5th Cir.), cert, denied. 452 U.S. 906 (1981) (internal citations omitted). Thus, the decision whether a waiver is effective depends on a searching appraisal of the particular facts of each case. See Rogers v. General Electric Co.. 781 F .2d 452, 455-56 (5th Cir. 1986). Mosley identified a variety of circumstances that should make courts especially wary of employee waivers— plaintiffs' limited education, their lack of legal experience, the absence of 43 counsel, and evidence of "overreaching" by the defendant employer. Id. at 94 6-47. In such cases, this Court concluded, the waivers should be subject to the "utmost scrutiny." id. at 947. Far from heeding Mosley's directive, the district court completely ignored a critical fact: many of the waivers at issue were obtained from signatories during the period when a "gag order" prevented counsel for the class from communicating with them. Both this Court and the Supreme Court have noted the danger this gag order posed to the signatories' intelligent evaluation of the conciliation offer. As this Court noted, [D]uring the pendency of the conciliation offer, potential class members were substantially deprived of the opportunity to confer with the attorneys presumably most knowledgeable, concerning whether they should accept Gulf's offer or look to the suit for redress. At they time they most needed counsel they were cut off from the attorneys most available until the time to make a choice had expired. Bernard v. Gulf Oil Co.. 619 F.2d 459, 470 (5th Cir. 1980) fen banc), aff'd, 452 U.S. 89 (1981). Similarly, the Supreme Court noted that the gag order may have been particularly injurious— not only to respondents but to the class as a whole— because the employees at that time were being pressed to decide whether to accept a backpay offer from Gulf that required them to sign a full release of all liability for discriminatory acts. Gulf Oil Co. v. Bernard. 452 U.S. 89, 101 (1981). As a result of the illegal gag order, not only were the signatories kept ignorant of a potential alternative avenue for obtaining relief but they were also cut off from a source of 44 free, expert legal advice, that was the practical equivalent of retained counsel. When it is necessary to balance the merits of the employee's claim of discrimination and the likelihood of success on that claim against the degree to which a proposed settlement will substantially accomplish the relief sought, it is asking too much to expect an aggrieved employee or applicant to make an intelligent settlement decision without the opportunity first to confer with retained counsel. Mosley. 634 F.2d at 945. Two additional factors exacerbated the danger that employees would make an uninformed choice to sign the releases. First, the wording of Gulf's offer, which stated that "'[b]ecause this offer is personal in nature, Gulf asks that you not discuss it with others,'" Gulf Oil Co. v. Bernard. 452 U.S. 89. 91, n. 1 (1981) (interpolation in original)— clearly could have dissuaded laymen unaware of their entitlement to consult with the lawyer of their choice from seeking legal advice.27 Indeed, plaintiffs submitted affidavits from several signatories who would have sought legal advice but were deterred from doing so by this statement in Gulf's settlement offer.28 Second, the court's exemption of 27That the letter suggested talking to a Gulf official, or an EEOC official, does not cure this infirmity. Gulf officials could hardly be expected to provide potential signatories with objective advice. Nor, given the EEOC's entry into a conciliation agreement, could it provide appropriate guidance, as Mosley, which involved a virtually identical circumstance, makes clear. 28Plaintiffs sought to intervene as named plaintiffs several signatories. See Rec. 1440. To the extent that the district court was correct in holding that the named, non-signatory plaintiffs could not adequately represent the class of signatories who claimed their waivers were ineffective, it erred in not permitting intervention of representatives who could. Thus, either the district court's exclusion of signatories from the certified class or its denial of intervention should be 45 Gulf's conciliation efforts from the scope of the gag order resulted in employees receiving information regarding only one of their options, increasing the likelihood that they would sign the releases out of ignorance. In the face of these factors, the appropriate course for the district court would have been to certify a class consisting of all the employees in the relevant job classes for purposes of determining the defendants' liability. Assuming that this Court reverses the district court's judgment dismissing plaintiffs' claims on the liability issues, defendants will have the opportunity, at Stage II proceedings, to challenge the claims for backpay advanced by individual claimants by asserting that those claims are barred because an individual signed a release. The requirement that each waiver be shown to be knowing and intelligent renders the district court's wholesale resolution of the issue at the class certification hearing both wrong as a matter of substantive Title VII law and inappropriate as a litigation management tool. Since the district court is required to consider the circumstances of each waiver individually before concluding that an individual's claim is barred, consideration of this issue should wait until the time when such individualized consideration is appropriate— the remedial proceedings. IX. THE DISTRICT COURT ERRED IN NOT ADMITTING DEFENDANTS' BUSINESS RECORDS This case was tried in April, 1984, and the record was expressly left open for submission of additional evidence until reversed. 46 June, 1984; the district court did not hand down its decision on the merits until September, 1986. In the fall of 1985, however, a dispute arose as to whether the court should consider certain exhibits submitted by plaintiffs. All of the exhibits were business records of the defendants, and all had been filed with the court the previous year. The district court excluded a total of 74 of these exhibits, more than half of all the exhibits offered by plaintiffs. (RE 65-68). The district court reasoned, first, that many of the disputed exhibits "were not served upon" the defendants until after the record was closed. (RE 66) . This holding was inconsistent with the meaning and purpose of Rule 5(a), Fed. R. Civ. P. Although Rule 5(a) requires that evidence filed with the court also be served on the defendants, in this case the materials were the defendants' own documents, and had been produced by counsel for the defendants as part of discovery. Rule 5(a) was not intended to require a plaintiff to provide defendants with additional copies of documents already in their possession. The district court also rejected certain exhibits on the ground "[tjhere is no evidence that said exhibits were timely filed." (RE 66). This problem was precipitated by the fact that, although the exhibits were in the possession of the court, the clerk's office had neglected to place on the documents a stamp indicating the date on which they were filed. Counsel for plaintiffs submitted an affidavit indicating that the exhibits in question had been handed to the clerk during the trial itself. 47 Rec. 1908. The judge's clerk indicated that while she sometimes neglected to date stamp documents offered at trial, she always date stamped documents received after trial by mail. id.29 Under these circumstances the exclusion of these exhibits was clearly improper. The federal ruls regarding filing and service should be "construed to secure the just, speedy, and inexpensive determination of every action." Rule 1, Fed. R. Civ. P. In resolving disputes about filing and service, the primary focus should be on whether there was prejudice to a party or a potential burden on the court. The disputed exhibits in this case were the defendants' own business records, and the exhibits had been filed with the court at least two years prior to its decision on the merits. The authenticity of the copies filed with the court was not in dispute, and their content was not in the least controversial. The materials dealt with and documented essentially undisputed facts, such as the structure of Gulf's lines of progression or the numbers of employees in particular positions. In such circumstances a district court in a non-jury trial should ordinarily proceed to resolve a case on the basis of all materials before it, rather than becoming embroiled in the sort of objections that were entertained and sustained by the court below. Among the exhibits offered by the defendant at trial, the following were not date stamped by the Clerk: DX 30-121, 123-127, 131-32, 140-52). 48 CONCLUSION For the above reasons the judgment and opinion of the district court should be reversed. Respectfully submitted JULIUS LeVONNE CHAMBERS JUDITH REED ERIC SCHNAPPER PAMELA KARLAN NAACP Legal Defense & Educational Fund, Inc. 16th Floor 99 Hudson Street New York, New York 10013 (212) 219-1900 ULYSSES GENE THIBODEAUX 1925 Enterprise Boulevard Lake Charles, Louisiana 70601 (318) 439-1060 STELLA MARIE MORRISON 1015 East Gulfway Drive Port Arthur, Texas 77640 (409) 985-9358 Counsel for Plaintiffs-Appellants May 1987 49 CERTIFICATE OF SERVICE I hereby certify that on this 15th day of May, 1987, I served a copy of the brief for plaintiffs-appellants and record excerpts on counsel for defendants-appellees by depositing same with an overnight mail delivery service or in the United States mail, first class postage prepaid, addressed as follows: Janet L. Lachman Gulf Oil Law Dept. 1301 McKinney, 21st Floor Houston, Texas 77010 (Overnight Delivery) Carl A Parker Long, Parker, Doyle & Murphy One Plaza Square Port Arthur, Texas 77642 Martin Dies Stephenson, Thompson & Dies 712 Division Street Orange, Texas 77630 Terry R. Yellig Sherman, Dunn, Cohen, Leifer & Counts, P.C. 1125 15th Street, N.W., Suite 801 Washington, D.C. 20005 Norton N. Newborn Norton N. Newborn Co., L.P.A. Chagrin Plaza East, Suite 308 23811 Chagrin Boulevard Cleveland, Ohio 44122 Donald W. Duesler 3160 Fannin Beaumont, Texas 77701 L.N.D. Wells, Jr. Mullinax, Wells, Baab & Cloutman, P.C. 3301 Elm Street Dallas, Texas Counsel for Plaintiffs- Appellants * •* ~r < f - o si vuAr CTVl 0 c^- // ̂'C i< L j0 L ^ < ^ 0 “fo AJL^lxl a-^z/ q^~ & S 5 ~ ^ u ^ s / /~v 4 5 c. #«• * R *, r